Modern Mining: Featured News

The Thorny River project of junior diamond exploration company Botswana Diamonds (BOD) is showing considerable promise, with a Technical Economic Evaluation (TEE) Report indicating that positive economics could potentially be achieved from a commercial mining operation. Modern Mining’s Arthur Tassell recently caught up with BOD’s Managing Director, James Campbell, at the Botswana Resource Sector Conference in Gaborone, and discussed with him the progress being made by BOD on its portfolio of projects in Botswana and South Africa.

Thorny River diamond project

A drill site in the Maibwe JV project area in the Central Kalahari Game Reserve in Botswana.

Thorny River is currently the ‘flagship’ of BOD’s portfolio. It covers three properties extending over 2 771 ha which – geologically – form an extension to the Klipspringer/Marsfontein kimberlite dyke pipe system to the east of Mokopane in Limpopo Province. As many readers will know, Marsfontein was mined between 1998 and 2000 by a De Beers/SouthernEra joint venture with its production over its short life being a phenomenal 1,9 million carats. The payback time on the capital invested in the operation was a mere three-and-a-half days, a feat which has now become part of mining folklore.

While BOD will be very lucky indeed if the Thorny River project ever delivers anything to match Marsfontein, the company’s evaluation of the three properties – which has included several phases of percussion and diamond drilling, microdiamond and petrographic analysis and a bulk sampling programme – has produced very promising results.

Says Campbell: “The TEE Report confirms that the deposit is between 1,2 and 2 million tons in size to a depth of 100 m with the grade being between 46 and 74 cpht. It estimates the carat values at between US$120 and US$220 per carat with the in-situ value being between US$60 and US$140 per ton. Clearly, we still need to refine these estimates but the figures, as they stand, are very encouraging and the report indicates that Thorny River has the potential to be developed as a commercial mine using the top end of the grade and value ranges.”

Part of BOD’s strategy is to explore in or near areas of past diamond production and, consistent with this philosophy, the company has now added the Mooikloof property in Limpopo Province to its project line-up. This is a known 2,5 ha diamondiferous kimberlite pipe which was discovered by De Beers in 1986.

“It’s immediately adjacent to the Oaks mine, which was a small but very successful mine which De Beers operated from the late 1990s through to 2007, in the process producing 1,4 million carats,” says Campbell (who knows the mine well from the long career he enjoyed at De Beers, which saw him reach the most senior ranks of the company). “It’s also close to the Lerala diamond mine – which is across the Limpopo River in Botswana – and forms part of the same geological belt – the Limpopo Mobile Belt – that hosts Venetia. It’s certainly the right address if you want to find diamonds.”

Campbell says that Mooikloof seems to have passed through the hands of several operators since being relinquished by De Beers. “There is very little information available, however, on what they did – if indeed anything – in terms of exploration, so it’s pretty much a ‘grass roots’ site from our perspective,” he observes. “We’ll now be applying modern ‘third generation’ exploration techniques to see whether past explorers missed anything and whether it has economic potential.”

It is, of course, possible for even operators of the calibre of De Beers to get things wrong, a classic case being the AK6 kimberlite in Botswana, now the Karowe mine, famous for its production of outsized gemstones, including a plus 1 100-carat diamond which is the second biggest ever to have been recovered from a diamond mining operation. De Beers evaluated AK6 in the early 1970s but dismissed it as being uneconomic. African Diamonds in conjunction with De Beers re-evaluated it in the period between 2004 and 2007, determining that it could in fact be economically developed. De Beers, however, once again relinquished its interest, selling out its stake to Lucara in 2008. Lucara in 2010 also bought out African Diamonds’ interest and went on to build the mine, which was opened in 2012.

Campbell, of course, was the MD of African Diamonds while John Teeling, currently BOD’s Executive Chairman, was Chairman of the company. The two men have been re-united in BOD, which started life in 2011 as the inheritor of the exploration assets of African Diamonds. These were all in Botswana, which explains the name adopted for the company. BOD is dual listed in Botswana and London and currently has a market cap of £5,6 million.

Apart from Limpopo Province, BOD is also active in the Free State. In October last year, it announced the ‘re-discovery’ of eight Group 1 kimberlites in the province in an area which hosts the famous Jagersfontein and Koffiefontein mines and which is also close to the Kimberley mine in the Northern Cape.

“The project area, which now covers around 36 000 ha of ground, was identified using a range of techniques, including satellite imagery and the examination of historical records housed in archives in Bloemfontein and Kimberley and the Africana Museum in Johannesburg,” recounts Campbell. “Using the identified anomalies as a base, research indicated that a number of small diamond mines or workings existed in the area for some time prior to 1880. They were closed due to an economic recession at the time and most of the records disappeared during the Anglo-Boer War. However, there was enough information available to set us on the right track and we were able to re-discover the kimberlites that underpinned the historic mining.”

BOD has now completed detailed ground geophysical work which has revealed that the kimberlites range from 0,3 to 1,15 ha in size, the biggest being Vlakfontein. The company is currently assessing the diamond indicator values in each pipe to decide priorities for drilling.

All BOD’s South African projects derive from an option and earn-in agreement it announced in February last year with Vutomi Mining and Razorbill Properties 12 (collectively known as Vutomi). Interestingly, a sizeable chunk of Vutomi (30 %) is owned by Campbell and his long-time colleague John Shelton, who worked with him at both De Beers and Rockwell Diamonds. “Our main reason for investing on a personal basis in Vutomi was to persuade the BOD board that it had top class exploration properties,” Campbell notes. “Putting our own money into the venture was a way of demonstrating our confidence in the assets.”

In Botswana, the original focus for BOD, the company remains very active. It has two joint ventures (JVs) in the country. One – Sunland Minerals – is a 50/50 JV with Alrosa of Russia, only rivalled worldwide as a diamond player by De Beers. The other – Maibwe – is a JV between BCL (51 %), Future Minerals (20 %) and Siseko (29 %), with BOD’s interest deriving from its 51 % stake in Siseko.

The Sunland JV is mainly targeting the Central Kalahari Game Reserve (CKGR), already home to one diamond mine, Ghaghoo, which is currently on care and maintenance, and also Petra’s KX-36 discovery. It also holds several licences in the Orapa Kimberlite Field. “The current field programme for H1 2018 – which is being supervised by BOD – has seen us following up on a number of previously identified priority geophysical targets in the CKGR using ground magnetics and soil sampling. The objective is to turn the geophysical targets into drill targets and we have a drilling programme planned for H2,” says Campbell.

The Maibwe JV is also focused on the CKGR and has 10 licences in the south west of the game reserve. Kimberlites in the project area have delivered what Campbell calls “some of the most enticing microdiamond results I’ve ever seen.” Progress, however, has been held up by the fact that BCL – best known for owning the Selebi-Phikwe nickel/copper mine – is in liquidation and unable to finance an agreed work programme.

“We would like to buy BCL’s share of the JV and we’ve already held talks with the liquidator,” states Campbell. “We believe strongly in the project and want to move it forward as soon as we can.”

While most of its efforts will continue to be concentrated in Botswana and South Africa, BOD has now also taken small steps into Zimbabwe, recently announcing a ‘Memorandum of Understanding’ with Vast Resources, which – among other things – operates the Pickstone-Peerless gold mine in that country. In essence, the two companies have agreed to exchange information from past exploration on areas prospective for diamonds in Zimbabwe and work towards establishing a special purpose vehicle which will develop and exploit any diamond resources identified.

“Zimbabwe represents a natural extension of our operations,” notes Campbell. “Like Botswana and South Africa, it lies on the Kaapvaal Craton, which is the most prospective craton in the world for diamonds, and it is also very under-explored for diamonds. Vast is now mainly engaged in gold mining but it so happens that it is the owner of an excellent database relating to diamonds in Zimbabwe. We have built up our own database on diamonds in Zimbabwe so, between us, we have a great resource, which will serve to guide our efforts.”

On the subject of diamond exploration generally, Campbell stresses the need for a company such as BOD to have a generous pipeline of projects. “Inevitably, many prospects will not meet hurdle rates so one needs to accept that projects will fall out of the pipeline on a fairly regular basis. As an example, we’ve now decided not to pursue our Ontevreden pipe project, located near the mothballed Helam mine of Petra. This was a geophysical anomaly with great mineral chemistry and great geochemistry. Our drilling confirmed the existence of a kimberlite pipe but also showed that it was much smaller than anticipated and didn’t warrant any further work.”

Campbell makes the point that BOD is one of only a handful of junior diamond explorers operating in Botswana and South Africa. “In South Africa, the only other junior company undertaking diamond exploration is BlueRock Diamonds while in Botswana there are only two active juniors apart from ourselves  – Pangolin Diamonds and Tsodilo Resources. While this doesn’t reflect well on the health of the diamond exploration industry in South Africa, the upside is that good ground is readily available.”

Summing up, Campbell says BOD’s vision is to make the next commercial diamond discovery. “If we’re successful, the rewards could potentially be huge. The original shareholders in African Diamonds, which is really BOD’s predecessor company, got their investment back 25 times over. Certainly, this was an unusual case, given the incredible quality of AK6, and probably unlikely to be repeated. Nevertheless, we in BOD believe there are good kimberlites still to be found and that we’re looking in the right places with the right partners using the right technology,” he concludes.

Contact Modern Mining

Title: Editor
Name: Arthur Tassell
Email: mining@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

Title: Advertising Manager
Name: Bennie Venter
Email: benniev@crown.co.za
Phone: +27 11 622-4770
Fax: +27 11 615-6108

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